Last checked at 8 Feb 2012 08:00
Press Release UC RUSAL AND PHOSAGRO SIGN LONG-TERM SUPPLY AGREEMENT
Moscow, 8 February 2012 - UC RUSAL , the world's largest aluminium producer, and PhosAgro , a leading global vertically integrated phosphate-based fertilizer producer, today announce an agreement for the supply of fluoric salts until 2034.
The parties have signed a long-term agreement with the aim of further modernising PhosAgro subsidiary Ammophos in Cherepovets (Vologda Region) and increasing the supply of fluoric salt to RUSAL's plants.
PhosAgro currently supplies 23 thousand tons of aluminium fluoride per year to RUSAL. In the period 2012-2015, PhosAgro plans to invest RUB 2.2 billion with the aim of increasing production at Ammophos by 12 thousand tons per year. Increased production and supplies of fluoric salts to RUSAL are planned from the middle of 2015, and are expected to reach 35 thousand tons per year in 2016.
Prices will be determined by a formula that includes an investment component. The parties are also considering implementing a similar arrangement at PhosAgro subsidiary Balakovo Mineral Fertilizers in Balakovo (Saratov Region).
The supply agreement with RUSAL guarantees PhosAgro long-term sales of fluoric salts, and will allow the company to invest in expanding its production capacities and enhance the environmental security of Ammophos.
"PhosAgro is a valued and reliable supplier and we are pleased to confirm formally our partnership in this way," RUSAL Commercial Director Pavel Ovchinnikov said. "Additional volumes of fluoric salts from PhosAgro will provide security of supply for RUSAL and guarantee world-class fluoric salts for the aluminium smelters we are currently building at Boguchansky and Taishet."
PhosAgro CEO Maxim Volkov said: "We greatly value our relationship with RUSAL, and are delighted that today's agreement not only secures a long-term future for the supply of fluoric salts, but also gives us the ability to invest and expand our production capacities and achieve a guaranteed return on our investment. Furthermore, this agreement will enhance profitability and increase the breadth and depth of uses for components of apatite concentrate, helping us to plan for the future on a long-term basis."
Note for editors: Fluoric salts are produced during the processing of apatite concentrate for use in mineral fertilizers, and are an important component of the aluminium smelting process.
For Mass Media Enquiries:UC RUSAL Vera Kurochkina +7 495 720 5170 Vera.Kurochkina@rusal.com OJSC "PhosAgro"+7 495 231 2747Irina Evstigneeva, Head of Corporate Finance and Investor RelationsTimur Belov, Press Officer
About RUSAL
UC RUSAL (www.rusal.com) is the world's largest producer of aluminium, in 2010 accounting for approximately 10% and 10% of global production of aluminium and alumina, respectively. UC RUSAL employs about 72,000 people in 19 countries, across 5 continents. UC RUSAL markets and sells its products primarily in the European, Japanese, Korean, Chinese, South East Asian and North American markets. UC RUSAL's ordinary shares are listed on The Stock Exchange of Hong Kong Limited (Stock code: 486), global depositary shares representing UC RUSAL's ordinary shares are listed on the professional compartment of Euronext Paris (RUSAL for Reg S GDSs and RUAL for Rule 144A GDSs), and Russian depositary receipts that are issued on common shares of the Company are listed on MICEX (RUALR) and RTS (RUALR) stock exchanges.
About PhosAgro
PhosAgro (www.phosagro.com) is a leading global vertically integrated phosphate-based fertiliser producer. The Group focuses on the production of phosphate-based fertilisers, feed phosphate and high-grade phosphate rock (P2O5 content of not less than 35.7 percent), as well as ammonia and nitrogen-based fertilisers. In 2010, the Group was the largest phosphate-based fertiliser producer in Europe, the largest producer of high-grade phosphate rock worldwide and the third largest MAP/DAP producer in the world (excluding China), according to Fertecon. PhosAgro is also a leading producer of MCP feed phosphates in Europe, and the only producer in Russia.
PhosAgro has 2.1 billion tonnes of resources (according to JORC) of high quality apatite-nepheline ore, representing over 75 years of production. The Group also controls substantial Al2O3 resources, and has 41% of Russia's rare earth oxides resources.
The Group's mines and phosphate rock production facilities are located in the mountainous areas of the Kola Peninsula in the Murmansk region of northwest Russia, whereas its fertiliser and feed phosphate production assets are located near the city of Cherepovets in the Vologda region and near the city of Balakovo in the Saratov region of southwest part of European Russia. The Group is the only global vertically integrated fertilizer producer that derives approximately 90% of its consolidated gross profit from the phosphates segment. PhosAgro's 1H 2011 IFRS revenue was $1.7 bln and EBITDA was $620 mln. The С ompany's net debt/EBITDA ratio was 0.6 at 30 June 2011.
Disclaimer
The information contained in this press release is for media advice only. The contents are true and accurate at the time of publishing, however, may change over time.
All announcements and press releases published by United Company RUSAL Plc areavailable on its website under the links http://www.rusal.ru/en/stock_fillings.aspx and http://www.rusal.ru/en/presscenter.aspx, respectively.
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